All of a sudden, everyone on Wall Street loves Unity Software stock. Furthermore, More and more analysts are unifying behind a bull thesis on Unity Software (U 8.
S of the graphics software company rocketed 14% yesterday after Jefferies raised its price target to $35 (remarkable data), in this volatile climate.
On the other hand, On the other hand, Today, three more analysts are chiming in on Unity -- and the stock is up 10 (remarkable data), in light of current trends. 8% through 9:55 a.
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Valuing Unity stock In a trio of notes this morning, UBS raised its price target on Unity stock to $33, with a neutral rating; Wedbush raised its price target to $39 with an outperform recommendation; and Morgan Stanley with a good news/bad news note: Morgan Stanley analyst Matthew Cost writes today on The Fly that he's seeing "marked imvement" with Unity Ads sales up 15% to 20% (this bears monitoring).
Unity has "duced a fundamentally more competitive ad duct," says Cost, that's translating into tremendous sales growth. Nevertheless, Is Unity stock a buy.
Furthermore, But here's the weird part: Cost gives Unity stock an overweight rating, but only a $25 price target, which is below the $38 Unity stock costs today, in light of current trends.
So what's an investor to make of that, considering recent developments. Moreover, Morgan Stanley might have made a typo, and meant to value Unity stock higher, in light of current trends.
Alternatively, what Cost might be trying to say is that Unity would be a buy, in today's market environment. At the right price. On the other hand, And that's a sentiment I agree with.
With $308 million in trailing free cash flow and a $15 (something worth watching).
8 billion market cap, Unity stock now trades at a steep 51 price-to-free-cash-flow ratio, in today's market environment.
Additionally, This seems expensive to me given most analysts forecast the company will grow FCF only 26% annually over the next five years.
On the other hand, But if you cut the stock's price 35% or so, to $25 a, $10. Moreover, 4 billion, or 33. 5 times FCF, the valuation looks more attractive.
In contrast, At that price, I might even buy some myself (which is quite significant). At the same time, Rich Smith has no position in any of the stocks mentioned.
The Motley Fool has positions in and recommends Jefferies Financial Group and Unity Software (remarkable data), in light of current trends.
At the same time, The Motley Fool has a disclosure policy (which is quite significant).